At the hearing, Miller acknowledged that the agency planned its initial disclosure about having targeted conservative groups through a planted question at a lawyers' conference.
"It was a prepared Q and A," Miller said when asked about IRS official Lois Lerner's response to a question from a lobbyist at an American Bar Association conference last week.
When pressed whether the question was planted, Miller said, "I believe that we talked about that, yes."
Miller did not elaborate on why the IRS chose such a strategy to reveal what has become a scandal over whether the tax agency treated some conservative groups fairly.
Without identifying lower-level IRS employees involved, Miller initially said that one employee had been disciplined because of the scandal, then later said two had been disciplined.
He asked budget-cutting Republicans to give his agency more funds to beef up tax enforcement at the IRS, suggesting that the agency's difficulty in handling waves of applications by tax-exempt groups had been a factor in grouping conservative organizations for review.
Miller sometimes seemed defiant, as he grimaced and threw up his hands while answering questions.
At one point, Miller said he did not think the IRS had broken any laws when it drew up its targeting list—a response that elicited "wow" from Republicans on the committee.
Republicans have angrily accused Obama's administration of using government powers to target political foes. They say the IRS scandal is one example of a federal government that has grown too large and intrusive.
"Is this still America?" asked Republican Rep. Kevin Brady of Texas.
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Obama is racing to get in front of a scandal that threatens to eclipse his second-term agenda. He has twice appeared in public to condemn the IRS's actions and has promised to cooperate with three congressional investigations and a Justice Department probe. He has, however, resisted demands for a special prosecutor to look into the allegations.
An Explosion of Advocacy Groups
An internal IRS watchdog reported this week that IRS investigators had singled out groups that had conservative-sounding phrases such as "patriot" and "tea party" in their titles when they applied for a tax-exempt status.
(Read More: How to Tell If the IRS Is Eyeing You)
Such status allows groups to keep their donor lists secret while engaging in limited political activity. Political campaigns, by contrast, must make their donors lists public.